Investing.com - Federal Reserve Chair Janet Yellen warned Tuesday that the central bank could start raising interest rates sooner than expected if the U.S. labor market continues to improve more quickly than anticipated.
In remarks prepared for the Senate Banking Committee, Yellen said that the central bank will have to hike interest rates sooner and higher than expected if the labor market continues to surprise.
The Fed chief added that if the economic performance is disappointing, then rates will be more accommodative than currently expected, while reiterating that a high degree of monetary accommodation remains appropriate.
"Although the economy continues to improve, the recovery is not yet complete," Yellen said.
Following Yellen’s comments, the U.S. dollar was modestly higher against the euro, with EUR/USD easing down 0.07% to trade at 1.3610.
Meanwhile, U.S. stock markets were modestly higher. The Dow tacked on 0.2%, the S&P 500 inched up 0.1%, while the NASDAQ added 0.1%.
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